Ed Whitacre's Secret Plan To Save GM

New General Motors Chairman Edward E. Whitacre Jr. was quick to dismiss the automaker's former chief executive after just eight months on the job, saying GM wasn't moving fast enough. But if Whitacre, who took over as CEO while GM searches for a permanent replacement, has a better idea of how to run the company, he's not sharing it publicly.

And for American taxpayers who now own 60% of the automaker by virtue of a $50 billion federal bailout, that's reason to worry.

Since forcing out Frederick "Fritz" Henderson as CEO on Dec. 2, Whitacre, the former chairman and chief executive of
AT&T
, has had three opportunities to publicly share his strategy for fixing GM. But instead of demonstrating the kind of public accountability he demands from others within GM, he seems to be avoiding it so far.

Whitacre called a news conference Dec. 2 to announce Henderson's departure, but he refused to take any questions. Then, on Tuesday, he backed out of a conference call with reporters, opting instead for a carefully controlled "Web chat" later the same day, during which he could choose which written questions to answer. He ignored four or five questions about his strategic priorities but did answer when asked where he was (in a conference room at GM's Detroit headquarters, he wrote. "It's kind of cold in here.")

Maybe that explains his icy responses to questions about the challenges GM still faces, five months after emerging from bankruptcy.

No, he's not satisfied with GM's 2009 performance, but he wouldn't share the company's objectives for 2010 sales and market share--"as much as we can get," he wrote.

A stock offering, he wrote, will occur "when we're ready." There are no plans for further job cuts. He does not want a chief operating officer or president to serve as his right-hand man. Negotiations to sell Saab are continuing. The company has "a real good candidate" for chief financial officer. His new management team will be "terrific." The future in Europe looks "great." GM will continue to do well in the Asian market, which is "big and growing."

What he didn't address: exactly how he intends to speed up GM's mission "to design, build and sell the worlds best vehicles now that he's in charge, or how he'll measure the progress of his newly appointed management team. When asked how long the young cadre of executives has to show results before their jobs are in jeopardy, Whitacre wrote, "Not long. :-)"

Yes, Whitacre and his new board of directors have pushed through some major changes since GM emerged from bankruptcy on July 10. They reversed a decision to sell GM's European Opel division, citing its crucial engineering value. And after pushing out Henderson, Whitacre chose Mark Reuss, an engineer, (not a finance specialist as in the past) to be president of GM's core North American operations. He's also urged GM to be more aggressive in its marketing efforts, which is yielding results.

But GM, which reported a net loss of $1.15 billion for the shortened third quarter (July 10-Sept. 30), still has a long way to go.

"We want to make this country proud of this company again," said Reuss, who, along with Susan Docherty, vice president of sales and marketing, filled in for Whitacre on the media conference call. "The only way I know how to stabilize this company ... is to make, sell and develop better vehicles than anybody else," Reuss said. "I've told our engineering folks, and now I'm telling everybody in North America, we need to focus on being the best. The words 'competitive' and 'good enough' are gone from our vocabulary."

If GM does that, Reuss said, its other problems "will take care of themselves."

I'm the Detroit bureau chief for Forbes, which means I spend most of my time covering the automotive industry. But I also keep an eye on the rest of America's heartland—where stuff is manufactured and grown. I've been on the auto beat for more than 20 years at Forbes, Busine...